Financial performance

Income

Net income came in at € 4.7 million in 2017, compared with € 2.6 million in 2016. The operating income of € 4.8 million was € 2.3 million higher than in 2016. This increase was largely due to a € 3.6 million increase in the management fee, offset by a € 1.3 million increase in operating expenses.

Management fee

The management fee increased by € 3.6 million to € 34.3 million in 2017 (2016: € 30.7 million). The increase in the management fee was driven by the 12% increase in the total assets under management compared with 2016. All the Dutch funds and International Investment contributed to this increase in assets.

Operating costs

Operating costs rose by € 1.3 million (4.4%) to € 29.5 million in 2017, compared with € 28.3 million in 2016. These higher costs were the result of a € 1.6 million increase in personnel costs and a € 0.4 million increase in amortisation costs and lower other operating costs of € 0.7 million.

The higher personnel costs were due to an increase in the number of FTEs to 152.5 in 2017 (2016: 136.6 FTEs), and the hiring of temporary staff. This increase will enable Bouwinvest to record controlled growth of its assets under management and remain state-of-the-art as an organisation. The extra temporary staff were primarily deployed to fill open vacancies and for the management of ongoing projects.

Amortisation costs increased by € 0.4 million in connection with the accelerated amortisation of renovations and inventory. This was related to the decision, taken jointly with the owner, to renovate Maincourt in Amsterdam in 2018.

Other operating costs came in € 0.7 million lower than in 2016. Most of the decline was due to € 0.5 million lower IT costs, due largely to lower IT project/update costs in connection with the planned upgrade of our core application SAP. Office accommodation costs were also € 0.2 million lower, following the settlement of services costs for the years 2015 and 2016 and the termination of the lease agreement for our meeting space in the Olympic Stadium in 2016.

Fiscal result

The deferred tax assets for 2017 are recognised at € 0.8 million, based on losses from previous years that may be settled with the tax authorities through to year-end 2018. At year-end 2017, Bouwinvest has recognised a deferred tax liability of € 0.7 million for the difference between the fiscal and the commercial valuation of participations.

Financial position

Bouwinvest’s shareholders’ equity increased by € 4.7 million to € 34.0 million in 2017, due to the addition of the net profit. The solvency ratio declined slightly to 78% in 2017, from 79% in 2016.

Cash position

At year-end 2017, Bouwinvest had a total of € 27.9 million available in its current account with our house bank ABN AMRO. This was more than sufficient to cover all outstanding liabilities and was also in line with the formal requirements of the Alternative Investment Fund Manager Directive (AIFMD).

Profit allocation and dividend policy

The management proposes to pay out a dividend of € 4.0 million and to add € 0.7 million to the other reserves in 2018.

Taxes

Bouwinvest Real Estate Investment Management B.V. is in talks with the Dutch tax office concerning the objectivity of the offsets relating to the redevelopment of the Damrak - Nieuwendijk projects in Amsterdam. The discussion centres on which part should be allocated to the redevelopment which Bouwinvest Development B.V. carried out on behalf of the Retail Fund NV. So far the results are unclear.